Accession Number : ADA210185

Title :   Learning to make Decisions: When Incentives help and Hinder.

Descriptive Note : Technical rept.,

Corporate Author : CHICAGO UNIV ILL GRADUATE SCHOOL OF BUSINESS

Personal Author(s) : Hogarth, Robin M. ; McKenzie, Craig R. ; Gibbs, Brain J. ; Marquis, Margaret A.

Report Date : JUN 1989

Pagination or Media Count : 56

Abstract : Under what conditions do explicit incentives affect learning and performance in decision making? Nothing that feedback often confounds information concerning the underlying structure of decision-making tasks (i.e., how variables are related) and levels of performance, we distinguish tasks on dimensions of a) complexity and b) exactingness. By 'a' we mean the ease or difficulty of inferring the underlying structure of the task, by 'b' the extent to which erroneous decisions are penalized. Errors are heavily penalized in exacting environments but lenient environments are forgiving. It is assumed that incentives increase effort and attention but do not have a direct effect on performance. Instead, by increasing effort and attention, incentives increase expectations of performance. When higher aspirations are not satisfied, however, frustration ensues leading to lower performance. It is argued that exactingness is unlikely to be important in tasks that are inferentially simple or complex because of ceiling and floor effects: in the former, there is little room for improvement; in the latter, little possibility for decrements in performance. in tasks of intermediate complexity, exactingness is predicted to have an inverted-U shaped relation with performance. This occurs because feedback in exacting environments induces contrary forces. On the one hand, it is more refined, providing greater opportunities for learning; on the other, it is liable to be more frustrating with outcomes falling below expectations. Since increases in expectations induced by incentives are likely to be satisfied in lenient environments but frustrated in exacting ones, incentives are predicted to help performance in lenient environments but hinder in exacting. (SDW)

Descriptors :   *DECISION MAKING, *LEARNING, CEILING, FLOORS, FRUSTRATION, PERFORMANCE(HUMAN), INFORMATION SYSTEMS, SPACE(ROOM).

Subject Categories : PSYCHOLOGY

Distribution Statement : APPROVED FOR PUBLIC RELEASE

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